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TMI Blog2019 (11) TMI 1540X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hotel Project of the Corporate Debtor without which a Five Star Hotel cannot start functioning. Being an experienced contractor in fire fighting work segment in similar projects, the Operational Creditor should have taken keen interest in resolving the snag works as above and obtained a Joint Compliance Report duly signed by both the parties in order to prove their bona fide - As per the conditions for EPC contract if there are claims from either party they have to follow the procedure of trying to reach the agreement and if it is not acceptable they must approach a Dispute Adjudication Board. Evidently, there is a dispute in the instant case in respect of which the parties can at their choice approach a Dispute Adjudication Board. Petition dismissed. - IBA/315/2019 - - - Dated:- 26-11-2019 - Dr. R. Varadharajan, Member (J) and Anil Kumar B., Member (T) For the Petitioner : A. Kevin Thomas For the Respondents: K.S. Ravichandran, PCS and S. Manjula Devi ORDER ANIL KUMAR B., MEMBER (T) 1. This Application has been filed invoking the provisions of Section 9 of the Insolvency and Bankruptcy Code, 2016 ( I B Code, 2016 ) in the format as prescribed u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a the following: (i) Letter of acceptance dated 05.12.2013 (ii) Various Invoices from serial Nos.2 to 17 in the series of ETA/C070/GBJ on various dates as mentioned in the Part V (iii) Final Bill Certification and Final Audit Report of K. Mustaq Ahmed (iv) Service tax amount reimbursement documents submitted to Corporate Debtor (v) VAT amount reimbursement documents submitted to Corporate Debtor (vi) Certificate of Practical Completion Pumps Commissioning Report and Handing over Certificate dt. 05.11.2016 (vii) Copy of the dishonoured cheques along with bank advice (collectively) (viii) Form 5 Application in CP/894/IB/C-II/2018 (ix) Memo submitted by Corporate Debtor in CP/894/IB/C-B/2018, along with copies of cheques (x) Order dated 15.10.2018, dismissing CP/894/IB/C-B/2018 as withdrawn (xi) Copies of e-mail correspondences (xii) Copies of Dishonoured cheques along with bank advice (xiii) Form 3 Demand Notice dated 14.01.2019 (xiv) Ledger Statement of Operational Creditor (xv) Working of Computation of Default (xvi) Bank Statements 6. It is seen that the Operational Creditor has issued Demand Notice under Section 8 of the I B Code ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tain snag works which were reportedly taken care of by the latter. However, even though some of the cheques were cleared when presented for payment, the following cheques were dishonoured. (i) Cheque No. 921283 dated 05-11-2018 for ₹ 5,23,707 (ii) Cheque No. 921284 dated 05-11-2018 for ₹ 2,18,434 (iii) Cheque No.921285 dated 05-11-2018 for ₹ 1,10,242 12. The Operational Creditor has alleged that they have been repeatedly trying to get in touch with the Corporate Debtor who had not cleared the payments but restrained the Operational Creditor representatives from meeting with any of the Corporate Debtor representatives. In light of the same, the Operational Creditor issued the Demand Notice. The final payment of Invoice amount fell due 30 days from the date of certification of the third party consultant and the reimbursement of tax claims fell due 30 days from the date of submission of documents. The debt fell due again on 05.11.2018. 13. In the counter statement filed by the Respondent/ Corporate Debtor, it has been inter-alia stated that: a) The Application was filed with malafide intent to avoid reconciliation of Accounts, to avoid and wriggle o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd you have not submitted your final completion certificate yet, also below are the snag lists in your works. We have tried to contact you and no one was there to respond our problems. Kindly look into the issues and lets sort out the issues at the earliest. Regards A Joseph Gamillus d) After detailed deliberations, the Corporate Debtor accepted to pay the Principal amount claimed in CP/894/(IB)/2018 in four instalments which included the tax components and issued the post dated cheques for the said payments with a condition that the Operational Creditor has to complete all the pending snag works and report completion. The Corporate Debtor has also filed a Memo along with the Schedule of Payment and details of Cheques issued and also reiterating the explicit condition that all snag works have to be completed immediately within the payment period. e) The Corporate Debtor has further submitted that these snag works were not completed within the time stipulated which was brought to the notice of the Operational Creditor and it has been alleged that there has been no response to the mails of the Corporate Debtor, after which reply mail dated 31.10.2018 forming part of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ir inability to honor the cheques if the snag works were not completed and would issue stop payment instructions to the Banks, while they have honoured all other cheques issued by them in those instances where the claim due to the Operational Creditor had not been disputed by the Corporate Debtor. j) It has been further submitted that the final certification in the manner required to be done as per contract was not completed. It only carries an endorsement by the Quantity Surveyor. However, the Quality assessment and confirmation as regards compliance with contractual conditions etc. are to be done only by the Engineer which was absent in the certification. 14. This Tribunal has considered the averments made by both the parties in their application and counter and the submissions/arguments during the course of hearing. It is found that the Operational Creditor has moved the application before this Bench consequent upon the alleged failure on the side of the Corporate Debtor to abide by the terms of compromise memo indicating the number of cheques vis-a-vis the amount payable by honouring the cheques. 15. On a perusal of the records we find that out of the 12 cheques for an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in advance even prior to the initiation of present proceedings. The issue of snag work remained unresolved as per the information available in the document on record and no evidence could be produced by the Operational Creditor to demonstrate that they have completed the snag work as requested by the Corporate Debtor. The Corporate Debtor has released the payment in respect of admitted portion of the debt due to the Operational Creditor but issued stop payment instructions to the Bank for the amount of three cheques in respect of the disputed portions it shows that there exists dispute. 19. It is observed from Page No.20A of their application submitted by the Operational Creditor in paragraph 3.3 pertaining to conditions of contract both the parties have accepted FIDIC conditions of contract for construction of Buildings and Engineering Works. As per such conditions for EPC contract if there are claims from either party they have to follow the procedure of trying to reach the agreement and if it is not acceptable they must approach a Dispute Adjudication Board. Evidently, there is a dispute in the instant case in respect of which the parties can at their choice approach a Dispu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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